Ming and Dao
[2018] FamCA 430
•14 June 2018
FAMILY COURT OF AUSTRALIA
| MING & DAO | [2018] FamCA 430 |
| FAMILY LAW – SPOUSAL MAINTENANCE – Interim – Lump sum – Periodic. FAMILY LAW – INJUNCTIONS – Interim. |
| Family Law Act 1975 (Cth) |
| Redman and Redman (1987) FLC 91-805 |
| APPLICANT: | Mr Ming |
| RESPONDENT: | Ms Dao |
| FILE NUMBER: | SYC | 8463 | of | 2017 |
| DATE DELIVERED: | 14 June 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Watts J |
| HEARING DATE: | 12 March 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Kearney, SC |
| SOLICITOR FOR THE APPLICANT: | Pigdon Norgate Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Batey |
| SOLICITOR FOR THE RESPONDENT: | Juris Cor Legal |
Orders
Pending further order:
Within 14 days, by way of lump sum spousal maintenance, the wife pay to the husband the sum of $100,000.
Pending further order, the wife pay to the husband, by way of spousal maintenance, the sum of $1,944 per week, with the first payment to be made within seven (7) days of these orders and weekly thereafter.
The spousal maintenance payable to the husband pursuant to order 2 hereof to the husband is to be varied each year on the 1st of July, commencing 1 July 2019 to such sum as shall be determined by multiplying the spousal maintenance payable on the review date by a fraction in N/B where “B” is the Consumer Price Index for Sydney (All Groups) published by the Australian Bureau of Statistics (CPI) in respect of the quarter ended 12 months prior to the review date, and “N” is the CPI with respect to the quarter year ending on the day immediately preceding the review date.
Further, by way of spousal maintenance, the wife pay regular instalments on the lease of the motor vehicle driven by the husband.
Pending further order, the wife be and hereby is restrained from by herself, her servants and/or agents doing and/or causing or permitting to be done, any of the following:
(i)Alienating or further encumbering any of the assets, income or undertaking of any of the entities save for operating the businesses in the usual course;
(ii)Alienating or further encumbering any of the shares in any of the entities;
(iii)Issuing any new shares or otherwise altering the shareholding (including any rights and entitlements attaching to or any other incident of the same) in any of the entities;
(iv)Removing, replacing or appointing any director or other officeholder of any of the entities;
(v)Removing, replacing or appointing any appointor, trustee beneficiary of any Trust; and
(vi)Exercising any power of appointment or distributing of capital or income, or any power of revocation, variation or re-settlement in respect of any Trust.
The wife forthwith notify the husband in writing upon the receipt by her of any notice of and/or upon otherwise becoming aware of any intention by any other person or entity to take any action so as to permit or cause any of the matters subject to paragraphs 5.1 to 5.6 inclusive above to occur.
Pending further order, the wife be and hereby is restrained from by herself, her servants and/or agents doing and/or causing or permitting:
(i)Any increase in any liability secured by way of any existing encumbrance upon each of the Suburb B property, the Suburb C property and the D Street property, including by the increase of the amount owed on any present facility;
(ii)Any increase in the liability of any of the entities beyond the current level of any facility presently available; and
(iii)Any dealing with respect to her interests in each of the Suburb B property, the Suburb C property and the D Street property.
Pending further order, each of the husband and the wife be and hereby is restrained from operating in any way upon Commonwealth Bank account number …58 other than for the purpose of the payment of scheduled repayments for loan accounts to the Commonwealth Bank account in the parties’ names and for the payment of building insurance in respect of the Suburb B property, the Suburb C property and the D Street property.
Pending further order, the wife be and hereby is restrained from dealing with any property or entities of the parties in which the husband is a director and/or shareholder or in which he has an interest other than in the ordinary course of business without the prior written consent of the husband, which consent not be unreasonably withheld.
The parties be restrained from doing any act or thing, or causing or permitting any other person to do any act or thing, including writing, posting or sharing images on social media, that has intention or effect the denigration of the other party or that party’s family.
The wife have liberty to approach the court on 14 days’ notice by way of filing an application in a case to vary orders 5, 7 and 9 with a supporting affidavit setting out why it is she needs to be able to carry out a certain transaction which the orders prohibit in circumstances where she has already asked the husband for permission and he has refused to give it.
I note pursuant to [64] of the Reasons, the matter is to be referred back to the List Clerk who shall list he wife’s application for exclusive occupation and other orders.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Ming & Dao has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 8463 of 2017
| Mr Ming |
Applicant
And
| Ms Dao |
Respondent
REASONS FOR JUDGMENT
The husband makes an interim application for orders:
1.1.The wife to make a payment to him of $100,000 in respect of the husband’s costs and disbursements of these proceedings;
1.2.The wife pay interim spousal maintenance in the sum of $2,500 per week (with CPI indexation);
1.3.Injunctions directed to maintaining the structure of the parties’ corporate interests, real properties and payment of costs associated with them and to restrain the wife from dealing with business assets other than in the ordinary course of business without the prior written consent of the husband which consent would not be unreasonably withheld; and
1.4.An injunction restraining the wife from denigrating him or his family on social media.
The interim application also sought orders requiring the wife to make disclosure. There was no submission made by senior counsel for the husband in relation to that part of the application. The wife, of course, has a general duty to provide financial disclosure from time to time and in a timely manner.
BACKGROUND
The wife is 55 years of age. The husband is 50 years of age. The parties disagree on when they commenced cohabitation; the husband asserting 2004, and the wife asserting 2006. The parties married in 2007.
The parties purchased a property in Suburb E together in October 2005.
On 22 September 2009, a document entitled “Financial Agreement under Section 90C of the Family Law Act 1975” was signed by both the parties.
The wife asserts the parties separated on 1 October 2016. The husband says it was in March 2017. The parties continue to reside under the one roof.
At the time the parties met the wife owned properties at Suburb F, Suburb G and in China.
The parties first incorporated H Pty Ltd (“the company”) in which they were both directors and shareholders in October 2005.
In 2006/2007, the parties established a business, in Suburb J. The company ran that business.
In 2006, the company established another business in Suburb J.
In 2007, a property was also purchased at Suburb K, Queensland in the joint names of the parties.
In 2007/2008, the parties incorporated a further business in Suburb L.
In 2008, the parties sold Suburb E at a profit and bought at Suburb B, holding the property as tenants in common as to 70 per cent to the wife and 30 per cent to the husband.
In 2009, a further business was opened. Shortly after opening this business a financial agreement was signed.
In 2009, the parties established a self-managed superannuation fund.
In 2010, the parties purchased a property in the CBD of Sydney.
Between 2010 and 2012, the parties established a number of companies and trusts for specific purposes associated with their business operations.
In 2012/2013, another business was set up in Suburb M.
In 2013, the parties incorporated N Pty Ltd which operated a centralised supply outlet to service the other businesses.
The property at Suburb K was sold in 2013.
The husband asserts that upon the demands of the wife, he transferred his interests in various companies to her in 2014.
The parties jointly purchased a property in Suburb C in 2015 for $3,820,000.
In 2015, Dao Superfund Pty Ltd became the trustee of the parties’ self-managed superannuation fund.
In 2015, the parties purchased a second property at Suburb B.
In 2016, the parties purchased another property at Suburb J through a corporate entity. The parties sold the second Suburb B property in 2016 at a loss.
In 2016, the wife established a number of companies in her own name and at the end of 2016 the wife says the parties separated.
In 2017, the husband asserts that the wife started to isolate him from business activities.
On 24 October 2017, the wife’s solicitors informed the husband that he had been removed as director from 12 companies.
In November 2017, the wife stopped authorising the payment of the husband’s business credit cards that he had previously operated.
On a rough count, either or both the husband and wife are involved in about 28 corporate entities and trusts, many of which are interrelated.
The wife asserts in her financial statement that she has about $8,422,000 worth of property with liabilities of slightly over $5 million. There is no valuation evidence of the properties or businesses.
THE FINANCIAL AGREEMENT AND INTERIM PROPERTY SETTLEMENT ORDER
The financial agreement which is Exhibit 4 and dated 22 September 2009 purports, on its face, to provide a division of property whereby the wife pays the husband $100,000 (adjusted for CPI from September 2009) and the husband transfers to the wife his interests in all the other valuable assets. It is the position of the wife that this document constitutes a binding financial agreement and excludes the court’s jurisdiction in respect of making any property order. The husband will, in these proceedings, seek to challenge the validity of the agreement or otherwise have the agreement set aside.
The controversy in relation to this agreement means that the ability of the husband to bring proceedings under s 79 of the Family Law Act 1975 (Cth) (“the Act”) is uncertain. Consequently, no interim application can be made for a lump sum order in the sum of $100,000 under s 79 of the Act. It would be possible to seek enforcement of the provisions in the agreement for the payment of $100,000 but that would require the husband to acknowledge the validity of the agreement and the husband does not do so.
SECTION 74 AND S 117 OF THE ACT
That leaves the husband in the position of relying on either s 74 of the Act (spousal maintenance) or s 117 of the Act (costs) (the husband did not seek to rely upon s 114) to support an application that the wife pay to the husband a lump sum amount of $100,000.
The husband gives evidence at [92] of his affidavit that he has entered into a retainer agreement with his current lawyers and that he is already indebted to them for unpaid fees of $12,000 and unpaid counsel fees of about $7,000. He paid his previous lawyers $20,000. He predicts that his costs of the proceedings with costs of counsel and valuation will be up to $200,000.
The husband’s financial statement indicates that he does not have any liquid funds. He is a joint holder of account #...58 with the Commonwealth Bank of Australia. This is a holding account which is used to service periodic payments on fixed debt. It is current balance is approximately $94,000, which is down from $210,000 as of October 2017. It seems the wife has ceased to put periodic funds into that account. The husband has been receiving since October (when the wife ceased to allow him to be involved in the business activities) an amount of $1,251 per week by way of informal spousal maintenance. Apart from receiving a mobile phone and use of motor vehicles associated with the business, the husband is not receiving any other income or benefit from the businesses.
I accept the husband has a need to receive a lump sum to contribute to his legal costs.
The question arises as to whether or not the wife has the capacity to pay that lump sum amount by way of spousal maintenance to assist litigation funding. Annexure JM2 of the husband’s affidavit affirmed 19 December 2017 contains the concession that the wife is in a position to pay an amount of $100,000 as adjusted for CPI from 22 September 2009. This, however, is in the context, amongst other things, of the husband transferring his interest in Suburb C and Suburb B to the wife and vacating Suburb C.
Senior counsel for the husband draws attention to the requests for information that have been made to the wife for financial information in relation to the nine business and N Pty Ltd that services those businesses. The husband asserts that not only has the wife not provided that information but she has not complied with pre-action procedures, the rules or responded to a notice to produce and has generally failed to provide updated financial information as to the profitability and cash flow of the businesses conducted under the web of corporate structures and trusts.
Counsel for the wife did not seriously dispute that the wife had been non-responsive in terms of providing detailed financial information in relation to the trading activities of the entities. Given the lack of financial disclosure and the undisputed fact that the wife controls all business operations, it is proper to make a lump sum spousal maintenance order in the sum of $100,000 for the purposes of funding the husband’s litigation costs.
It is not necessary to deal with the husband’s application in the alternative pursuant to s 117 of the Act.
PERIODIC SPOUSAL MAINTENANCE
The husband currently receives from the wife a regular periodic payment in the sum of $1,251 each week.
The husband seeks an interim periodic spousal maintenance order in the sum of $2,500 per week. Although the wife’s formal application is that the husband’s application for periodic spousal maintenance be dismissed, she agrees that she will continue to pay the current amount of $1,251 a week and to continue to pay the costs of the lease payments on the husband’s motor vehicle that are currently paid.
In relation to the husband’s earning capacity, he currently has no income from salary or wages. His only income is what the wife currently provides him from the businesses. It was an agreed fact that the wife has effectively locked the husband out of the income stream which the businesses have previously provided to him.
Counsel for the wife pointed to two paragraphs in the husbands December 2017 affidavit. At [68] the husband describes what he did in the businesses and that it included marketing and promotional activities. The husband deposed in December 2017 that he was still at that time a senior official at the local Chamber of Commerce. Counsel for the wife submitted that I would infer that the husband has significant contacts in the community which would enable him to obtain employment. Also highlighted was the husband’s statement at [84] that, in January 2018, the husband expected to travel to China, having been given the opportunity to assist a large Chinese business chain transition to the Australian market. In his December affidavit the husband indicated that he expected to expend at least $10,000 for airfares in relation to that trip. There is no indication from the husband in his updated affidavit as to what, if any, payments or emoluments he received as a result of those activities.
The husband has not given any evidence as to what efforts he has made to obtain employment outside the businesses from which he has been excluded. In the context of the interim maintenance hearing; where there are ample resources; where the husband has not in recent times worked outside the business enterprises which both parties have established and not as an employee of an unrelated party; and where the evidence is untested, it is not a matter of great weight that the husband has not provided evidence that he has looked for other work, even unskilled or low paid employment.
The fact is the wife has locked the husband out of what are extensive and, apparently vibrant, business enterprises. That, in itself, in this case is an adequate reason, which meets the threshold test in s 72(1)(c) of the Act. The husband is entitled to receive periodic payments from the income stream of those enterprises to adequately support himself.
In relation to the husband’s needs, he sets out in his financial statement that his weekly expenses are $5,542. That is an incorrect total.
The individual weekly amounts claimed by the husband are set out in the following table:
Item Amount Income Tax 370 Life insurance 126 Mortgage payments 1,400 Health insurance 90 Mastercard 5 Visa card 10 Amex 12 Maintenance for children of a prior relationship 308 Food 450 Gas 25 Electricity 100 Telephone 80 Motor vehicle lease 570 Petrol 150 Motor vehicle maintenance 100 Car parking 70 Clothes and shoes 385 Medical, dental and optical (not incl. health insurance premiums) 5 Entertainment/hobbies 50 Holidays/travel 300 Chemist/pharmaceuticals 5 Dry cleaning 50 Gifts 50 Hair dressing, toiletries 25 Racehorses 616 Foxtel/internet 35 TOTAL 5,387
The husband is not paying some of these expenses at the current time:
50.1.Given that the husband is not receiving any current taxable income, no tax would currently be being paid by the husband;
50.2.The wife is currently making payments in relation to the mortgage with the Commonwealth Bank;
50.3.The husband is currently not making any payments for gas, electricity, telephone, motor vehicle expenses and lease, and car parking; and
50.4.The husband, on the income he is being given by the wife, is not making other payments or the full amount of other payments being claimed.
Counsel for the wife challenged a number of the husband’s expenditure:
51.1.The amount of $80 per week by way of private telephone. He drew attention to [90.11] of the husband’s December 2017 affidavit in which the husband said that he has six telephone numbers, two personal numbers on a $99 per month plan, three business numbers and he also pays his mother’s account of about $60 per week. Counsel for the wife submitted that the telephone expenditure should be marked down to $40 per week.
51.2.In relation to car parking at $70 per week, counsel for the husband referred to [86] in which the husband says that he has always had significant parking costs at various business premises as they are located in built up commercial areas. He asserted in his affidavit that he continued to attend at the business premises to manage the staff and do marketing even though he is not now involved in the decision making. The wife seeks an order that he be excluded from attending at the business premises. That application, together with the application by the wife for exclusive occupancy, is to be dealt with on a date in the duty list which I will set when making orders.
51.3.Counsel for the wife also challenged the husband’s expenditure on clothing and shoes. At [90.6] the husband explains that he wears designer clothing and believes that that was important as “the face of the [business]”. Counsel for the wife made the point that the husband is currently not working in the businesses and does not need the same clothing budget. In comparison, the wife claims $120 per week for clothing and shoes for herself (and $200 per week for her children, one of whom is an adult and the other is in High School Certificate year).
51.4.The husband also claims “other expenses” in the sum of $616 per week. The other expenses are the weekly costs of maintaining his 10 per cent interest in two racehorses he acquired in early 2017.
In interim proceedings, the Full Court in Redman and Redman (1987) FLC 91-805 endorsed a statement made by Fogarty J in Williamson and Williamson (1978) FLC 90-505 as follows:
Another consequence is that on an application for interim maintenance, the court conducts ‘not as final or exhaustive a hearing as would be the case if one were hearing the matter finally’ ... the evidence need not be so extensive and the findings not so precise.
In this case, the word “adequately” in “adequately support… himself” needs to be considered in the context of s75(2)(g), “a standard of living that in all the circumstances is reasonable”.
I assess that it is proper to allow the following expenses for the husband:
Item Amount Life Insurance 126 Health Insurance 90 Food 450 Telephone 40 Petrol 150 Maintenance 100 Car parking 40 Clothing and shoes 120 Medical, dental and optical 5 Entertainment and hobbies 50 Holidays/travel 300 Chemist/pharmaceuticals 5 Dry cleaning 50 Gifts 50 Hair dressing/toiletries 25 Foxtel/internet 35 Child support 308 Total 1,944
In relation to the husband’s two racehorses, his evidence is that he purchased them in early 2017. Without more evidence, I am not prepared to find that expenditure on the racehorses are a necessary expense, even given comments I have otherwise made about the standard of living that the parties enjoy.
That spousal maintenance order will be predicated on the fact that the wife pays the husband’s lease repayments and he attends to his own health insurance.
For reasons set out above relating to the lack of response by the wife in providing detailed financial information in relation to the trading activities of the enterprises, I find the wife has a capacity to make these payments.
The husband’s expenses make no allowance for accommodation, as he is still living in the same residences as the wife. In the event that the wife is successful in her application for exclusive occupancy then a reasonable allowance for the husband’s new accommodation would need to be considered.
I find that it is proper to make an interim order that the wife pay the husband, by way of spousal maintenance, the sum of $1,944 a week.
INJUNCTIONS SOUGHT BY THE HUSBAND
The husband provided a written undertaking as to damages.
After the parties separated in either late 2016 or early 2017, the husband asserts that the wife began to progressively lock him out of the businesses. The husband says the wife began to prevent the husband from attending the business premises to account for takings, started isolating him from meetings and then removed the husband as director without his knowledge from the numerous corporate entities. In November 2017, the wife stopped authorising the husband’s payments on the business credit cards which the husband had previously operated. None of those assertions seem to be seriously disputed by the wife.
It is appropriate to make the orders sought by the husband on the basis that in the event the wife encounters a difficulty arising from the orders, she has the liberty to approach the court on 14 days’ notice by way of filing an application in a case with a supporting affidavit setting out why it is she needs to be able to carry out a certain transaction which the orders prohibit in circumstances where she has already asked the husband for permission and he has refused to give it.
The husband gives evidence about derogatory and inappropriate posts made by the wife about him on social media. He seeks an order restraining the wife from acting in a similar way in the future and is agreeable to having the same order made against him. It is proper I make that order.
WIFE’S APPLICATION FOR EXCLUSIVE OCCUPANCY AND INJUNCTIONS SOUGHT BY THE WIFE
Because of the later service of the wife’s application for exclusive occupation and other orders restraining the husband from participating in business activities filed 9 March 2018, I made the following notation and direction on 12 March 2018:
2. I note that during submissions it was agreed that given the late service of the wife’s application for exclusive occupation and injunctive orders, neither of those applications could proceed. Those applications will be adjourned to another duty list after I deliver my reasons.
3. The husband is to file and serve a reply and supporting affidavits to those applications within 14 days of delivery of my reasons.
These outstanding applications will be referred to the list clerk.
I certify that the preceding sixty-five (65) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 14 June 2018
Associate
Date: 14.6.18
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